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Equitas Holdings, a Chennai-based microfinance and micro-housing finance company, has raised $ 26 million (Rs 140 crore) equity capital. It raised Rs 90 Crore from World Bank arm IFC and another Rs 50 Crore from its existing investors, Microventures and Caspian, to fund its geographical expansion and scale up its new businesses.

Equitas Holdings is a core investment company with operating subsidiary NBFCs.

The company through its operating subsidiaries recently diversified into the allied financial services segments of used commercial vehicle finance and affordable housing finance.

Equitas had transferred its microfinance business to Singhivi Investment & Finance (SIFPL) from April 1, 2011. After the transfer, Equitas was renamed as Equitas Holdings and SIFPL was renamed as Equitas Micro Finance India.

Under the new structure, there is a holding company and three operating subsidiaries – one each for microfinance, vehicle finance and housing finance. Equitas acquired two NBFCs (SIFPL and V A P Finance Ltd) to run the micro and vehicle finance businesses and has obtained a licence from National Housing Bank in January 2011 for housing finance business.

The current microfinance entity will then become the non-operating holding company. V A P Finance Ltd has been reconstituted as a private limited company and renamed Equitas Finance Pvt Ltd (EFPL). The housing finance business will be undertaken by Equitas Housing Finance Pvt Ltd (EHFPL). The holding company will hold the common capital and infuse capital into the subsidiaries.

Equitas Holdings, headquartered in Chennai, operates its three businesses through more than 350 branches across nine Indian states and has a borrower base of more than 1.3 million and a loan portfolio of $212 million.

The investors and banks are taking a second and renewed look at the sector owing to a better clarity in the industry. The sector is receiving a lot of activity through investments, private placements and securitisations.

In September, Royal Bank of Scotland picked up 6.8 per cent stake in SKS Microfinance, the country’s erstwhile largest microfinance firm in a deal worth Rs 58.7 crore ($10.8 million) through an open market transaction.

Around the same time, Bangalore-based Ujjivan Financial Services Pvt Ltd, a microfinance institution focused on India’s urban poor, raised Rs 45 crore ($8.3 million) in equity capital from IFC as part of its two-tiered fifth round of funding.